Jeep is the fastest growing brand in the U.S., according to Chrysler Group, and played a central role in its strong second quarter.
Chrysler Group LLC, which is now part of Fiat Chrysler Automobiles, rode a steady increase in sales to 22% increase in net income during the second quarter.
Net income for the second quarter totaled $619 million for the quarter, compared to $507 million in the year-ago quarter, the Chrysler group said in its preliminary financial report for the second quarter and first half of 2014.
Net revenue for the second quarter was $20.5 billion, up 14% from $18 billion a year ago. Net revenue for the first half of the year was $39.4 billion, compared with $33.4 billion a year ago. Increased shipments of vehicles such as the Ram pickup and the all-new Jeep Cherokee drove the year-over-year improvements. Jeep is also now the fastest growing brand in the auto industry.
The Chrysler Group’s adjusted net income the first half of 2014 was $1.1 billion, up from $696 million in the first half of 2013.
However, the adjusted net income excludes the company’s prepayment of a note held by the UAW Retiree Medical Benefits Trust, also known as the VEBA, and a charge for commitments associated with the January memorandum of understanding signed with the UAW.
After factoring in the payments, the company posted a net loss od $71 million for the first half of the year.
Chrysler’s modified operating profit was $985 million in the second quarter, or 4.8% of net revenue, up from $808 million reported in the prior-year period. The 22% increase was due to higher volumes, improved mix and better pricing. However it was offset by an increase in incentives to entice buyers to purchase older or slow-selling vehicles as well as unfavorable foreign exchange rates.
Modified operating profit for the first half of 2014 was $1.6 billion, or 4% of net revenue, up from $1.2 billion in the first half of 2013.
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Chrysler Group’s worldwide vehicle sales totaled 723,000 for the second quarter, up 12% from 643,000 sold in the second quarter of 2013, driven largely by a 16% increase in the company’s U.S. retail sales.
Worldwide vehicle sales were 1.3 million for the first half of the year, which is a slight increase from last year’s 1.2 million during the same period. Chrysler Group was the sales market leader in Canada for the first half of the year. U.S. fleet sales as a percentage of total U.S. sales were 21% in the second quarter this year, down from 22% a year ago.
(Click Here for details about the robust sales numbers in July.)
The U.S. market share for the Chrysler Group was 12.1% for the quarter, up from 11.4% a year ago; market share in Canada was 15.3%, up from 15.1% in the year-ago period.
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Chrysler’s modified earnings before interest taxes, depreciation and amortization or EBITDA was $1.7 billion for the quarter, or 8.3% of net revenue, up 14% from $1.5 billion a year earlier. Modified EBITDA for the first half of the year was $3 billion, up from $2.5 billion in the prior year.
Cash as of June 30 was $13.3 billion, up from $12.4 billion as of March 31 and $11.9 billion on June 30, 2013. Total available liquidity as of June 30 was $14.6 billion, including $1.3 billion available under an undrawn committed revolving credit facility.
Free cash flow for the second quarter and first half of 2014 was $1 billion and $1.9 billion, respectively. Financial liabilities at June 30 totaled $13 billion compared with $12.9 billion as of March 31 and $12.5 billion as of June 30, 2013.